Tuesday, February 26, 2008

Last week Phil Wainewright wrote a great post (as he always does) called SaaS vendors, eat your own dogfood, or die. In the post, he describes how SaaS companies need to embrace the SaaS services available in the ecosystem.

I support the viewpoint from the post that SaaS companies need to have religion and leverage SaaS in everyway they can – further, I believe if they don’t they leave themselves open for other SaaS companies to disrupt them. From discussions with the infrastructure management of many leading SaaS companies I often hear how they are forced to use some on-premise pieces on the back-end reluctantly. This has provided the motivation for a few of our SaaS infrastructure investments (eg. Aria – SaaS billing and customer management).

Phil’s title had me thinking along another important vein for SaaS companies…literally to eat THEIR own dogfood and use their own product. For example, Salesforce aggressively uses Salesforce to manage prospects, Omniture eats their own analytics for online marketing, Teleo uses their own product for recruiting and SuccessFactors brags about their own talent management. Luckily we don’t all work for tobacco companies…

My belief is that SaaS companies must use their product for a few reasons:

1) Point of View: it puts everyone in the company in the seat of the customer. This means that the internal teams will live the same pain, the same experience and the same leverage that you are espousing as a vendor. This POV extends the advantages SaaS has of bringing the vendor closer to the customer by putting the customer in the office next door.

2) Analytics: By using your own product you will think about the product extensions and depth of how to apply the benefits of analytics to build stronger products and best practices. SaaS companies have a huge edge with analytics so it makes sense to use them internally as well.

3) Sales Roadblock: a fair question for a prospect to ask would be, “if your solution is so great, why aren’t you using it?" SaaS vendors can do their sales team a great favor by getting ahead of this question.

Any interesting SaaS companies that are using their own product and want to reach out – I’d love to hear from you. Please email me at Lars@humwin.com.

Wednesday, February 13, 2008

I spent this morning with George Kembel, Director of Stanford University's d. school, and a d. school Fellow, Kerry O'Connor.

The Stanford Institute of Design is an inter-disciplinary school that brings together business school students, engineers, and social scientists into an integrative, iterative, and immersive process of discovery.

The process is integrative in that multiple voices of feasibility (engineering), viability (business), and usability (social science) are baked into the process. The process is iterative in that the teams use rapid prototyping and user testing to discover product/need fit. The process is immersive in that the team is placed in the environment of the targeted user to observe and listen.

The core idea is that innovation must be cross-functional, A/B test driven, and that products are shaped gradually over time through a process of feedback rather than declaratively and upfront. The philosophy holds that rather than fight amongst the team about what to do, solve the argument via data-driven tests that are designed to answer key unknowns.

This implies that the only "right" part of a plan that it is "wrong." Moreover, rather than be paralyzed by that fact, the best teams harness the voices of all key departments in the company, let the user guide them, and invest themselves in a process of data-driven, prototype-driven discovery that slowly peels away the "right" answer.

The competitive position of the company is anchored more on whether it is a learning organization - flexible, nimble, user-driven - rather than whether its founders enjoyed a single epiphany of genius.

With respect to venture capital, the implications are interesting. Most teams pitch three-year plans and product roadmaps. Like the book the Black Swan holds, the odds of the forecasts being right are nil - fundamentally, given the forecast error inherent in any plan, the investment decision should not lean heavily on the proposed plan.

Rather, as George and his colleagues would argue, perhaps the investment should be predicated on a defined user/customer target, a process and fluency with A/B testing and prototyping, an integrated team, and an openness to discovery rather than a priori certainty.

Thursday, February 07, 2008

Hummer Winblad is pleased to welcome Alex Bakman and his VKernel team to the Hummer Winblad family. We are very excited for the opportunities ahead and look forward to working together. The recent press release and further details can be found here.

Enterprise IT environments are undergoing one of the biggest shifts in 25 years – shifts that have not been seen since the move from mainframes to client-server. Big shifts in infrastructure open up large gaps in the current management solutions. Virtualized environments provide many benefits to the enterprise from flexibility to lower TCO but along with that have introduced a few headaches too…

vKernel is a new platform for system management in enterprises that are embracing virtual infrastructure to power their businesses. Enterprises IT managers face increasing challenges as virtualization spreads within the datacenter. vKernel provides an essential suite of virtual appliances tailored to meet the virtualized datacenter including chargeback and capacity planning management. These appliances require zero installation, are quick to deploy and provide insights within minutes.